April 7, 2020 / 9:31 AM / 3 months ago

Infineon says Cypress takeover cleared, funding in place

BERLIN (Reuters) - Infineon Technologies (IFXGn.DE) said on Tuesday that it had received final regulator clearance for its takeover of U.S. Cypress Semiconductor (CY.O) and that funding was in place to complete the deal.

The German chipmaker announced the $10 billion takeover last June but the deal took longer than expected to reach the finish line as it underwent a U.S. review of its national security implications.

The transaction, which will create a leader in automotive powertrain and in-car systems, is being funded with cash and committed acquisition financing from banks, Infineon said in a statement.

These comprise 2.7 billion euros ($2.93 billion) in proceeds from share and hybrid bond placements in 2019. The remainder will be covered by a loan from a syndicate of 20 banks with maturities ranging from March 2022 to June 2024. These would be refinanced in due course.

Infineon said it would keep liquidity corresponding to 1 billion euros plus at least 10% of sales on its balance sheet.

Shares in Infineon were up by more than 7% in a broadly stronger European market that is rallying this week on growing evidence that countries are succeeding in containing the spread of the novel coronavirus pandemic.

Infineon on March 26 withdrew its forecast for revenue to grow by 5% in the fiscal year to Sept. 30, saying the pandemic could lead to a noticeable decline in revenue and weigh on its profitability.

Reporting by Douglas Busvine; Editing by Madeline Chambers

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